Graham Barry, president of E Quote in New York, says the broker's business plan is to become the Nasdaq of the FX world. "We want to become a major exchange network for second- and third-tier banks and corporates looking to provide liquidity for the FX market," he told FX Week.
"Using this system, clients will be able to complete split trades, deal in forwards and swaps, monitor real-time profit and loss, and have up-to-date transaction reporting via e-mails with trade details at the end of each trade," says Barry.
He says only three banks are signed up to provide liquidity, but wouldn't disclose their names. The number of banks involved will increase once the system goes live, he adds.
E Quote approached a number of the major investment banks about joining the venture a year ago, he says, but few were interested. Barry expects that to change, as the larger investment banks want to provide as much liquidity in FX through as many channels as possible.
He says the electronic FX market will soon change radically as large corporates become market-makers in FX and trade with each other, as well as with banks. Corporates could use electronic communication networks such as E Quote to hedge, by offering option quotes on currencies, he says.
Barry says the E Quote system will be the first browser-based FX dealing platform to provide access to a range of products in spot FX, currency options and FX futures.
He says 90--95% of trading is expected to be completed electronically, but that there will be a "dealer chatbox" facility on the service. This will enable instant communication between end-user and broker. This will be a temporary transition until clients feel comfortable trading all products electronically, adds Barry.
E Quote uses an application service provider (ASP) from Seattle-based software company Financial Market Solutions (FMS). FMS's Universal Trading Platform (UTP) is an internet-based dealing platform.
California-based global head of sales and marketing at FMS, John-Pascal Van Houden, says the system is highly scalable and can trade sophisticated products.
David Dowell, head of marketing at E Quote in New York, says that the firm looked at a number of ASP developers.
FMS was the only company that could supply a platform scaleable for the volume of trading eventually expected on E Quote, he says. It also had good technical support and was able to meet its specified timeframe for delivery, he adds.